According to a survey conducted on behalf of CIBC Bank at the beginning of March, 50% of Canadians would opt for a fixed mortgage rate today, compared to 39% last year.
At 32%, the popularity of variable rate mortgages has not changed. However, the percentage of people who are undecided has dropped considerably, from 30% last year to 18% this year. Conclusion: most Canadians who were undecided last year opted for a fixed rate given the stability of the interest rate.
Final result: just 6% of Canadians believe that mortgage rates will decrease over the next year, while 86% believe that they won’t change. If they do change, they will go up.
This is good news in the eyes of the CIBC, because it means that many owners took into account a potential increase in interest rates in their mortgage planning, which is a sign of caution.
“The fixed or variable question is one of the biggest considerations for new homebuyers and for those holding an existing mortgage, and the low rate environment this year is one more factor Canadians will need to consider as they choose the mortgage that is right for them,” commented Colette Delaney, Executive Vice President of Mortgage, Lending, Insurance and Deposit Products, CIBC.
Ms. Delaney reminds current and future owners that they must avoid choosing between a fixed or variable rate based solely on the current interest rate. Other specialists have emphasized this point many times. Examples: the borrower’s temperament and health, willingness to make additional payments at some point, ability to resist unnecessary spending, ability to save and whether or not they have a budget are other factors to take into account.
According to a survey conducted by BMO in February, two-thirds of Canadians foresee locking in their mortgage loan at a fixed rate to make sure they monthly payments are always the same.
No doubt about it: fixed rates are currently the most popular choice.
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